Weight-loss drugs could boost US GDP by 1% in coming years, Goldman says

[February 23, 2024]  (Reuters) - The widespread use of powerful new weight-loss drugs in the United States could boost gross domestic product by 1% in the coming years as lower obesity-related complications are likely to boost workplace efficiency, according to Goldman Sachs.

Some analysts have predicted the market for weight-loss drugs could reach $100 billion a year by the end of the decade, with Ozempic maker Novo Nordisk and Mounjaro producer Eli Lilly leading the race.

The class of drugs, called GLP-1 agonists, are being keenly pursued by several companies and more could enter the market depending on clinical trials. The use of GLP-1s could increase by anywhere between 10 to 70 million consumers by 2028, Goldman Sachs said on Thursday.

"If GLP-1 usage ultimately increases by this amount and results in lower obesity rates, we see scope for significant spillovers to the broader economy," Goldman economists said in a note.

"Academic studies find that obese individuals are both less likely to work and less productive when they do."

The brokerage estimated weight-loss drugs could bolster U.S. gross domestic product (GDP) by 0.4% in a scenario with 30 million users, and could rise to 1% with 60 million users.

Boxes of Ozempic and Mounjaro, semaglutide and tirzepatide injection drugs used for treating type 2 diabetes and made by Novo Nordisk and Eli Lilly, is seen at a Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023. REUTERS/George Frey

The current wave of healthcare innovation such as AI-powered drug discovery coupled with GLP-1s could raise the level of U.S. GDP by 1.3% in the coming years, equivalent to $360 billion per year in current exchange rates, with potential for an increase ranging from 0.6% to 3.2%.

"Effects are likely to be larger in the U.S. than in other countries, as health outcomes in other developed markets are generally better," the brokerage added.

(Reporting by Siddarth S in Bengaluru; Editing by Devika Syamnath)

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